Pricing Strategy Of Starbucks

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The roots of Starbucks go as far as 1971 and with the idea of fine coffee at the base of the company. With the original owners Jerry Baldwin, Zev Siegl and Gordin Bowker it did not know the success Howard Schultz brought to the company. Under his supervision, it spread from a small business into the top company in the coffee industry. Being the first in the market Starbucks is establishing the finest experience for its customers. The company is aiming to exceed their visitors and customers expectations with more than just a cup of coffee. Its management tends to show an extremely good work with the promotion as long as it has been growing and spreading worldwide. As it is depicted in the (Figure 1), the company claims that they provide a perfect…show more content…
But the core of the company remains fine coffee in its variations. Pricing Premium pricing strategy is used at Starbucks, which means that this strategy is aimed at taking advantage of the behavioral pattern of people who tend to purchase more expensive items based on the perceived relation between high value together with high price. Among the competing products Starbucks beverages are more extensive, for instance, McDonald's range of drinks. With the help of the current pricing strategy, Starbucks supports its high-quality image on the market. The company's high-end brand image is maintained by the firms generic strategy. Over the years, the prices tend to rise a little due to coffee means, dairy and some other raw material increasing in cost. Starbucks aims to keep or even make the prices for espresso and some other beverages lower, whilst increase the prices for labor-involving and bigger-in-volume drinks. They have both affordable and high-premium coffee offers, for instance, they may have a counter offer for one dollar for a coffee item and a seven-dollar offer for an exquisite Costa Rica coffee which is expensive to purchase…show more content…
In order to promote a new place of opening, they organize massive events. They went even further, for example, the smart partnership was introduced which is basically appointing a local representative so that the last ones could promote and endorse their brand (Marketing mix of Starbucks). In the (Figure 3) one can see a type of promotion strategy Starbucks use by proposing discounts in particular hours of the
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